Episode 198 – Hourly, Percentage or Flat Rate? How to Pay Cleaning...
How to pay cleaning employees
Episode 198 Enid Tate Enid’s Cleaning Service
Today Mike coaches Enid Tate, owner of Enid’s Cleaning Service on the topic of how to pay cleaning employees. Currently, Enid’s residential cleaners are paid hourly, but she want’s to switch them over to a % based pay.
This is one of those topics that doesn’t have a right or wrong answer. So, it’s important to understand the pros and cons and make an educated decision.
A benefit to this type of pay structure is that you are able to nail your COGS % (Cost of Goods Sold) from the get go so there are never any nasty surprises later in the month.
RESOURCE ALERT: Get more in depth about your bookkeeping HERE
One of the downsides to this when it comes to how to pay your cleaning employees is that they tend to want to pick and choose which jobs they want to do. They will decide which are “good” jobs and which are “bad” and possibly argue over who gets what jobs.
In addition to that, you may be facing quality issues. When you pay your cleaning employees hourly, they will tend to stay as long as possible to increase their paychecks. In a perfect world that means more time cleaning and paying attention to detail. However, this isn’t always the case, there’s always plenty of ways for your cleaners to waste time doing non-cleaning related work.
When someone is being paid by the job, there is a temptation to cut corners to finish the job quicker and move on to the next.
RESOURCE ALERT: Check out this episode on motivating your employees HERE
If you have your heart set on a % based pay, Mike isn’t a fan of complex systems. The simpler the better. He recommended making 2 (3 at the most) categories. Ideally, you have 1 flat rate for everyone and include bonus’ for reaching specific goals.
Consider using some of these as measuring sticks for your employees performance towards reaching those goals:
Time and attendance
time to complete the job
core value match
RESOURCE ALERT: Learn more about Core Values HERE
Once Mike and Enid have covered the good and bad, they move on to implementation:
When it comes to how to pay cleaning employees using this pay structure, the first thing you should do is pick a rate (going to be different for commercial than residential). For example something between 35-50%, for this example, let’s pick something like 40%. Then take the extra % from what you are willing to pay to create a bonus pool that you spend every month for people that qualify.
This way you aren’t moving people from one pay bracket to another and back down if they don’t perform. Avoid having to have those uncomfortable conversations about demoting them if they aren’t reaching their goals. That creates a lot of management headache and opportunity for you both to be upset with one another.
Once all your employees are on the same page, you keep those extra funds in a bonus account that you put towards employee development each month.
Perhaps you have a raffle draw every month and everyone that shows up on time every day gets one ticket. Or you could give a ticket for each goal hit and the employees that hit more goals have more tickets and chances to win.
Another idea is to split the pool into 3 levels. For example if the pool is $800, spit it to $500,$200 and $100. Then the employee who has the most tickets gets the $500 and so the second most gets $200 and so on.
Or something like ” This month it’s a big flatscreen tv and we’re all going to watch the Super Bowl and whoever wins the raffle gets to take the TV home”
KEY POINT: The idea is to make it fun and creative!
You don’t want to have the same event every month though. They will begin to associate it with their pay package. It’s not only about how to pay cleaning employees, it’s about motivating them and getting them excited to come to work every day.
An additional benefit to this system is you can use it to focus on problem areas within your workforce. Not only are you solving how to pay your cleaning employees but you can incentivse them to improve specific areas.
Finally, if you are having problems with tardiness within your company, make that month’s goals tailored to being on time. Once that problem is solved you can move on to other issues like quality control or whatever isn’t up to par.
Then if tardiness is taken care of but customer satisfaction is a problem you can move on to focusing on that issue for the next month.
There are so many ways you can use this pay structure to motivate and grow your cleaning business! We are eager to hear how it works out. Before Enid’s podcast comes to an end, she shares some of her amazing 25 years of experience with cleaning nation in the…